Why You Should Check Supplier ABNs
Do you check your supplier ABNs? Correct tax codes are essential for getting GST on the BAS right. Now is a good time to review supplier ABNs and GST status. Get in contact, and we’ll ensure you’re not paying more GST than you need.
Are you in the habit of checking your suppliers’ Australian Business Numbers? Are you providing your bookkeeper with source documents?
When you make business purchases, you should receive a valid tax invoice from the supplier to prove that your purchase is indeed a business expense. The ABN holds certain information, including contact details, business structure and GST registration.
Many business owners don’t routinely check suppliers' ABN nor provide their bookkeeper with any records, resulting in incorrect GST claims – either claiming too much or not enough.
How to Check a Supplier ABN
Go to the ABN Lookup website.
Enter the supplier ABN provided on their bill.
Review the current details, including the GST registration date. This will show whether a business is registered and, if so, from what date.
The entry will also show if an ABN has been cancelled.
Print or save the PDF extract and attach it to the supplier record in your accounting software.
You can search multiple ABNs by uploading an Excel spreadsheet template.
When to Check Supplier ABNs
It’s good practice to always check the ABNs of all new and major suppliers and any large or unusual payments. Always check the ABNs of suppliers you know to be new to the business.
If you have engaged the services of a bookkeeper, by providing them with source documents, usually they will check this information for you.
What if it’s Wrong?
It's not uncommon that suppliers (especially those new to business) charge GST on their invoices when they are not yet registered for GST. Some suppliers may also provide the ABN of another business. For example, one person may conduct business under both a sole trader ABN and a company ABN and provide you with an invoice from the wrong entity.
If you conduct a review of your suppliers’ ABNs and find that some have been charging GST in error, notify the supplier and ask for a refund of the GST or a credit to the value of GST incorrectly charged. Ask the supplier to reissue the correct tax invoices.
Another common error is to claim GST on purchases made from small overseas businesses that are not registered for GST in Australia.
Need Help with BAS Adjustments?
Once you have corrected the entries in your software, you will need to make a GST adjustment on your next BAS.
If you have made significant changes over multiple BAS periods, it may be challenging to correct the GST.
Talk to us if you’d like to conduct an audit of supplier details and pick up the necessary adjustments to GST. Amending prior BASs might result in further GST payable, but it could just as easily result in a refund!